Liability of foreignness is the inherent disadvantage experienced by foreign firms in host countries because of their non-native status.

Question

Quizplus · Accepted Answer

The liability of foreignness is a well-established concept in international business literature. It refers to the inherent disadvantage that foreign firms face in host countries due to their non-native status. This can manifest in various ways, such as cultural differences, legal and regulatory restrictions, language barriers, and lack of social connections in the host country. The liability of foreignness can increase the costs and risks of doing business in a foreign market, making it more challenging for foreign firms to compete with local firms.

Liability of Foreignness Is the Inherent Disadvantage Experienced by Foreign